Better budgets

The Egyptian Ministry of Finance has delivered a timely fillip to the country’s economy by automating a range of financial processes. Simon Duddy investigates how it made use of Oracle software to increase efficiencies.

|~|Ahab-2_m.jpg|~|Eyada: There was no automation except some Excel sheets that were produced by very few members of staff. |~|Under the tutelage of the Minister of Finance Dr Youssef Boutros Ghali, the Egyptian Ministry of Finance (MOF) has revamped its processes, giving a much-needed boost to the national economy. The Ministry looked to Raya Holdings for the implementation, with the integrator installing Oracle 9i Database and ERP software 11.5.10, with the GL and public sector budgeting modules implemented, as its centrepiece. The MOF used the Oracle applications implementation method (AIM) as a guideline and built the system on two HP Integrity rx7620-16 servers, with storage provided by a HP StorageWorks Enterprise Virtual Array 5000, which is connected to a backup tape library. This provided the basis for the Ministry to begin projects such as public sector budget preparation (PSBP) automation, and introducing e-payment for customs duties. These projects took slow, manual processes on to automated databases for the first time and have increased efficiencies, which in turn has had a positive impact on the Egyptian economy, according to Dr Ahab Khaled Eyada, senior IT advisor at the Egyptian Ministry of Finance. “The steps taken in improving customs processes and procedures during the last year have improved Egypt’s ranking in the latest World Bank Report,” he explains. Eyada was charged with the PSBP project in September 2004 and quickly made progress, achieving its phase one objective of automating budget preparation within six months. The first phase presented considerable challenges to the MOF, including the need to create tables to convert old code to new code. The new coding is the GFS2001, used by the International Monetary Fund and replaces a coding system that has been used for over 100 years. This required loading the previous three years of data on to the systems. A difficulty was that in the approximately 700 accounting units spread across Egypt, most had staff that were not trained to handle the new coding system. Therefore the majority of tasks had to be completed at the central office. “The previous method was using a traditional manual system, and we built everything up from level zero. There was no automation except some Excel sheets that were produced by very few members of staff,” says Eyada. “Now there are more than 600 PCs, the new applications are installed, the staff has had the necessary training and the network is up,” he adds. For the second phase, Eyada has moved on to budget management, which helps the Government to control budget reductions and increases and keep track of each item affected. This phase is concerned with leveraging the database information to create a positive impact on the bottom line. The MOF built a workflow for processes so the status of each change along with the approval that was obtained could be monitored, as well as ensuring the concerned accounting unit is notified. “The project will bring great benefits. Previously many employees were involved in controlling and reviewing the system, but now the control process is done through the automated system,” says Eyada. “Phase 2A is underway now and should be completed within nine months. This will represent a major change in Government budget preparation, and is only the second such project to be implemented in the Arab world, with most Governments in the region looking to start similar schemes within the next few months,” he adds. The MOF is still formulating Phase 2B of the project, which will be concerned with connecting the rest of the accounting units and linking with the Central Bank of Egypt. The Ministry will also select and implement a treasury management system at this time. This will set the Government up to embark on Phase 3 of the project which will concentrate on automating expenditure data transfer from the accounting units to the servers in the MOF, as well as creating a data warehouse and managing and controlling the presentation of monthly expenditure to parliament. In a further move to use IT to increase revenues, the MOF will also pilot an online customs payment scheme, which the Ministry says will be much faster and more efficient than the previous cheque-based method. “The problem with the existing system is that the collecting cycle for cheques is very long (3-5 weeks). Plus an error can lead to a stop in the process without the customer knowing that the procedure has stalled,” says Eyada. Under the new system, the importer will be able view his customs certificate over the internet and will be able issue the instruction to his bank to transfer fees to the customs account in the Central Bank of Egypt (CBE). Then the receipt will be printed in the assigned port so the importer will be able to declare his goods immediately. The pilot project will start in one port and if successful will be extended to other locations. Eyada plans to use the existing infrastructure of Egypt’s key banks, such as CBE, Egyptian Banks Company (EBC), National Bank of Egypt and Banque Misr, as the basis for the new system. “The good thing about of having EBC on board is that it has an ATM switch-based network that connects many of the country’s financial institutions. The beauty of the system is that we didn’t have to invest in any hardware. The only added item is the software, which is locally prepared and will be delivered to each of the banks,” explains Eyada. MOF has identified the desire to eliminate the physical movement of cash and enhance cash flow to the Government as the two main drivers behind the pilot. The Ministry is in the middle of a major IT revamp, which has already paid dividends in the projects mentioned. The Government will be hoping, however, that the best is yet to come.||**||